Following a call this week by the Office of Fair Trading (OFT) for clearer information from residential lettings agents about their charges, a survey shows that rental costs were down 0.3 per cent in January.
According to the survey, the average rent in January stood at £732 a month, which was 0.3 per cent down on the previous month and the lowest level since July last year. However, it was 2.8 per cent higher than in January 2012 and generally rents have been rising for several years reflecting the significant reduction in housing starts since the recession started.
The sharpest monthly fall in rental costs was in the south-east of England but there was a rise of 1.2 per cent in the East Midlands, and there will probably be rises on average in England and Wales in the coming months, the survey suggests.
The increase in the purchase of buy-to-let properties, helped by the Government’s Funding for Lending Scheme, helped to take some of the pressure off the limited supply of rental property on the market in a relatively low demand month.
The Report comes in a week of mixed news for the UK economy. Our key European markets seem likely to tip into a modest recession again, with Germany in particular reporting a 0.6% decline in output in the 4th quarter of 2012. The Governor of the Bank of England warned that inflation would stay above the official target for longer than their economists had been expecting. But, more positively, he prophesied a recovery on the horizon, with business services and manufacturing having grown modestly in 2012 and the recession in construction – especially relevant to house-building and rents – showing signs of coming to an end at last.
As an economist at Milsted Langdon, Kevin Butler, is able to share his in-depth research and expert views on a wide range of economic and financial topics.